International factory productivity gains

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Abstract
This paper analyzes influences on factory productivity gains by using detailed, consolidated, crosssectional survey data from 561 plants on three continents, and by using times series data from five plants of a single company (a major domestic auto maker). Some grand themes, all intuitively satisfying, surface in the regression results on both sets of data. Technology advance, throughput time reduction, work force involvement, quality, inventory reduction, and simplified organization all foster productivity gains. Furthermore, using data from another company (Square D), labor efficiency is debunked as a proxy for labor productivity; other forces are at play in influencing productivity gains.The breadth of the survey sample (United States/Canada, Europe, Korea) permits tests of two often‐touted hypotheses. It is frequently proposed that location‐related factors (e.g., culture, governmental policies) affect factory productivity. Careful examination of the statistical evidence, however, does not confirm this. Similarly, managers often state that process industry plants are more productive than nonprocess, more fabrication and assembly, plants. This assertion, too, is not confirmed by the statistical evidence. Other things being equal, process industry plants do not show productivity gains any greater than non‐process industry plants.

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